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USD/JPY Price – Range tightens further at around 161.60

  • USD/JPY consolidates around 161.60 as hawkish BoJ supporting Japanese Yen counters outperforming the US Dollar.
  • One BoJ member expects interest rates to rise to 2% as soon as possible.
  • BoJ’s Asada, PM Takaichi appointee, voted against the interest rate hike in the policy meeting this month.

The USD/JPY pair trades in a limited range around 161.60 during the European trading session on Wednesday. The pair consolidates as hawkish Bank of Japan (BoJ) bets are supporting the Japanese Yen (JPY) against the US Dollar’s (USD) continued outperformance.

Earlier in the day, the BoJ Summary of Opinions (SoP) of the June meeting showed that a majority of officials favor more interest rate hikes to counter mounting inflation risks. Also, one board member said Japan’s policy rate must be brought closer to the estimated neutral rate of around 2% as soon as possible.

The BoJ SoP also showed that new board member, Toichiro Asada, the appointee of Prime Minister (PM) Sanae Takaichi, voted against the hike, citing downside inflation and employment risks due to the Middle East crisis. In the policy meeting, the BoJ lifted interest rates by 25 basis points (bps) to 1%.

Meanwhile, a Reuters report shows that the BoJ is almost certain to deliver another interest rate hike this year in December.

At press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.1% higher to near 101.50, the highest level seen in over a year.

USD/JPY technical analysis

USD/JPY trades flat at around 161.65 at press time. The pair maintains a bullish near-term bias as price holds well above the 20-week exponential moving average (EMA) at 158.72, keeping the broader uptrend intact.

Weekly Relative Strength Index (RSI) at 64.11 stays in positive territory but below overbought levels, suggesting strong yet not extreme upside momentum.

On the downside, immediate support is seen at the round-level 160.00, followed by the 20-week EMA at 158.72. On the upside, the pair would enter uncharted territory if it breaks above the all-time high around 162.00.

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Australian Dollar steadies vs Japanese Yen as CPI cools, BoJ hawks

  • AUD/JPY experiences volatility amid cooling Australian inflation.
  • Australia’s annual CPI rose 4.0% while monthly prices fell 0.7%, both slowing much faster than markets expected.
  • JPY defense prompts government intervention and rate hike momentum, highlighting building pressures for a tighter monetary policy.

AUD/JPY remains steady after six days of losses, trading around 0.6920 during the Asian hours on Wednesday. The currency cross moves little as the Australian Dollar (AUD) experiences minor volatility following the release of Australia’s Consumer Price Index (CPI) data.

Australian inflation slowed more than anticipated in May, offering some relief to policymakers. According to the Australian Bureau of Statistics, the annual Consumer Price Index (CPI) rose by 4.0% year-over-year, down from 4.2% in the previous month and lower than the 4.4% market consensus. On a monthly basis, consumer prices actually fell by 0.7%, a sharp reversal from the prior month’s 0.4% increase and a softer reading than the forecasted 0.3% decline. Meanwhile, the Reserve Bank of Australia’s (RBA) preferred core inflation metric, the Trimmed Mean CPI, ticked up 0.4% for the month and rose 3.6% on an annual basis.

Over in Japan, momentum is building for tighter monetary policy just as government officials step up warnings to protect a weakening Japanese Yen (JPY). Japan’s Chief Cabinet Secretary Minoru Kihara stated that authorities will take appropriate action against excessive foreign exchange volatility if necessary. This stance was underscored by a high-level call between Japanese Finance Minister Satsuki Katayama and US Treasury Secretary Scott Bessent, keeping the market on high alert for official Yen-buying operations.

The Bank of Japan’s (BoJ) Summary of Opinions from its June meeting showed that a majority of board members supported raising the policy interest rate, noting that inflation risks are broadening and the underlying CPI is sustainably approaching its 2% target.

As a result of these conflicting forces, the upside for the AUD/JPY cross remains firmly capped. The combination of cooling Australian inflation, which dampens the need for higher RBA rate hikes, and heightened fears of direct currency intervention by Japanese authorities has prompted traders to handle the currency cross with extreme caution.

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AUD/JPY Price – Holds losses below 113.00 on intervention fears, bias stays mildly bullish

  • AUD/JPY attracts some sellers near 112.75 in Tuesday’s early European session. 
  • The cross keeps a mildly bullish vibe, but further consolidation cannot be ruled out with RSI holding below the midline. 
  • The first upside barrier emerges at 113.40; the initial support level to watch is 112.70.  

The AUD/JPY cross trades in negative territory around 112.75 during the early European trading hours on Tuesday. The Japanese Yen (JPY) strengthens against the Australian Dollar (AUD) as traders are on high alert for currency intervention from Japanese authorities. Japan’s Chief Cabinet Secretary Minoru Kihara said on Tuesday that he will take appropriate action against the foreign exchange moves if needed. 

On the other hand, a hawkish interest rate hold from the Reserve Bank of Australia (RBA) might underpin the Aussie. The Australian central bank decided to leave the Official Cash Rate (OCR) unchanged at 4.35% after its June monetary policy meeting last week. Despite pausing the interest rates, the board members signaled that further rate hikes might be necessary to achieve its goals.

Chart Analysis AUD/JPY

Technical Analysis:

In the daily chart, AUD/JPY retains a mildly constructive bias while it holds above the 100-day Simple Moving Average (SMA) and the lower Bollinger Band, suggesting underlying demand remains in place despite the recent pullback from the highs. The Relative Strength Index (RSI) at 43.6 leans slightly bearish but not oversold, hinting more at consolidation than a decisive reversal as price oscillates within the upper half of its broader Bollinger envelope.

On the topside, initial resistance is aligned with the Bollinger middle band at 113.40, and a sustained break above this area would open the door for a retest of the upper Bollinger Band around 114.78. On the downside, the immediate focus is on the 100-day SMA at 112.20 ahead of the lower Bollinger Band at 112.00, where buyers would be expected to show more interest if the pullback deepens.

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USD/JPY Price – Holds above 161.50; eyes multi-decade top despite intervention fears

  • USD/JPY holds steady following the previous day’s late pullback from the 162.00 neighborhood.
  • Intervention fears keep the JPY bears on the back foot and act as a headwind for spot prices.
  • Economic concerns and the wide US-Japan rate differential offer support amid a bullish setup.

The USD/JPY pair enters a bullish consolidation phase during the Asian session on Tuesday and currently trades just above 161.50 amid mixed fundamental cues. Spot prices, however, remain well within striking distance of a 40-year peak, around the 162.00 neighborhood set in July 2024, as traders remain on edge amid fears that Japanese authorities will step in to prop up the Japanese Yen (JPY).

Local broadcaster TBS reported that Japan’s Finance Minister Katayama held an online meeting with US Treasury Secretary Bessent to discuss the JPY’s sharp decline and potential intervention. Adding to this, Japan’s Chief Cabinet Secretary Minoru Kihara said that he will take appropriate action against the foreign exchange (FX) moves if needed. This holds back JPY bears from placing fresh bets and caps the upside for the USD/JPY pair.

However, economic risks stemming from the Middle East conflict and energy supply disruptions through the Strait of Hormuz continue to undermine the JPY. Apart from this, a persistently wide Japan-US rate differential keeps the JPY bulls on the back foot. The US Dollar (USD), on the other hand, stands firm near its highest level since May 2025, lending additional support to the USD/JPY pair.

Last week’s sustained breakout through the previous intervention zone, around the 160.50-160.60 area, comes on top of the recent solid bounce from the 200-day Exponential Moving Average (EMA) and keeps the broader uptrend intact. That said, the Relative Strength Index (14) is hovering in overbought territory near 70, which hints at risk of consolidation or a corrective pause rather than a confirmed near-term top for the USD/JPY pair.

Meanwhile, the Moving Average Convergence Divergence (MACD) indicator remains positive above the zero line, reinforcing the underlying upward pressure. In the meantime, the structural pivot around 160.60-160.50 should protect the immediate downside. Moreover, the 200-day EMA at 156.47 should provide a deeper layer of trend support if a sharper corrective pullback unfolds amid elevated RSI readings.

(The technical analysis of this story was written with the help of an AI tool.)

USD/JPY daily chart

Chart Analysis USD/JPY

Japanese Yen Price Last 30 days

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies last 30 days. Japanese Yen was the strongest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD1.73%1.49%1.66%2.90%2.62%3.16%2.85%
EUR-1.73%-0.24%-0.09%1.12%0.88%1.42%1.11%
GBP-1.49%0.24%0.21%1.43%1.16%1.68%1.39%
JPY-1.66%0.09%-0.21%1.17%0.99%1.51%1.10%
CAD-2.90%-1.12%-1.43%-1.17%-0.17%0.33%-0.04%
AUD-2.62%-0.88%-1.16%-0.99%0.17%0.53%0.22%
NZD-3.16%-1.42%-1.68%-1.51%-0.33%-0.53%-0.31%
CHF-2.85%-1.11%-1.39%-1.10%0.04%-0.22%0.31%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

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Yen Slides Toward 40-Year Low

The Japanese yen weakened to around 161.5 per dollar on Monday, hovering near its lowest level since 1986 as repeated verbal interventions from Tokyo failed to halt the currency’s decline. Finance Minister Satsuki Katayama said authorities stood ready to take appropriate action against excessive currency moves at any time, echoing earlier warnings. The yen has now surrendered all the gains made on April 30, when officials carried out a record-sized market intervention to support the currency. The latest drop came despite the Bank of Japan’s ongoing policy normalization, including a 25-basis-point interest rate increase to 1% last week. The currency also remained under pressure from heavy carry-trade activity, as investors continued to favor short yen positions amid the still-wide interest rate gap between Japan and the US.

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Yen Weakens Despite Verbal Interventions

The Japanese yen weakened beyond 161 per dollar on Friday, falling to its lowest level since July 2024 despite renewed verbal intervention from Japanese authorities. Chief Cabinet Secretary Minoru Kihara said on Thursday that the government remains prepared to respond to excessive currency movements whenever necessary. The yen has now erased all the gains recorded on April 30, when authorities conducted a record-sized intervention to support the currency. The latest decline came despite the Bank of Japan’s gradual tightening cycle, including a 25-basis-point rate hike to 1% earlier this week aimed at addressing an energy-driven inflation shock linked to the Middle East conflict. The dollar also strengthened following the Federal Reserve’s decision to leave interest rates unchanged while signaling increasing support for additional rate hikes later this year. The widening policy divergence between Japan and the US continued to weigh on the Japanese currency.

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Japanese Yen bears turn cautious amid intervention fears as Iran deal undermines USD

  • USD/JPY bulls pause as intervention fears support the JPY amid a modest USD downtick.
  • The US-Iran peace deal optimism counters the Fed’s hawkish tilt and weighs on the USD.
  • The US-Japan rate differential should cap the JPY and help limit the downside for the pair.

The USD/JPY pair holds steady above mid-160.00s during the Asian session on Thursday, consolidating its gains registered over the past four days to the highest level since July 2024. The US Dollar (USD) pulls back following Wednesday’s hawkish Federal Reserve (Fed)-inspired rally to a fresh high since late March amid the latest optimism over a US-Iran peace deal. Adding to this, intervention fears offer some support to the Japanese Yen (JPY) and contribute to capping the currency pair.

US President Donald Trump and Iranian President Masoud Pezeshkian electronically signed a Memorandum of Understanding (MoU) aimed at ending hostilities between the two countries and reopening the Strait of Hormuz. Furthermore, Trump said that the 60-day negotiation period to reach a final agreement on Iran’s nuclear program is not a hard deadline, boosting investors’ confidence. This, in turn, prompts some USD profit-taking and turns out to be a key factor acting as a headwind for the USD/JPY pair.

Meanwhile, traders remain on high alert amid speculations that Japanese authorities will step in again to prop up the domestic currency. In fact, Japan’s top foreign exchange diplomat, Atsushi Mimura, and Finance Minister Satsuki Katayama have issued repeated warnings that Tokyo is monitoring speculative moves and remains fully prepared to curb further JPY weakness. This, along with the Bank of Japan’s (BoJ) historic rate hike to the highest since 1995, limits further JPY losses and caps the USD/JPY pair.

That said, Japan’s borrowing costs remain lower than those of peer nations, including the US. In fact, the Federal Reserve (Fed) signaled the possibility of at least one rate hike this year after leaving its benchmark overnight borrowing rate anchored in the 3.5%-3.75% range on Wednesday. The persistently wide interest rate differential with the US keeps the JPY carry trade active, suggesting that the path of least resistance for the USD/JPY pair remains to the upside, and any corrective pullback should be bought into.

Japanese Yen Price Last 30 days

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies last 30 days. Japanese Yen was the strongest against the Canadian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD1.21%0.91%1.16%2.66%1.98%1.53%1.81%
EUR-1.21%-0.28%-0.04%1.44%0.79%0.30%0.61%
GBP-0.91%0.28%0.26%1.73%1.05%0.60%0.89%
JPY-1.16%0.04%-0.26%1.48%0.74%0.34%0.60%
CAD-2.66%-1.44%-1.73%-1.48%-0.64%-1.12%-0.82%
AUD-1.98%-0.79%-1.05%-0.74%0.64%-0.46%-0.16%
NZD-1.53%-0.30%-0.60%-0.34%1.12%0.46%0.28%
CHF-1.81%-0.61%-0.89%-0.60%0.82%0.16%-0.28%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

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Japan Signals Readiness to Respond to Yen Moves

Japan stands ready to act if needed to address excessive exchange-rate volatility, Chief Cabinet Secretary Minoru Kihara said on Thursday. He added that the government is prepared to respond to market moves at any time, stating, “We are ready to respond appropriately to currency moves as needed at any time.” He added that officials will continue to closely monitor foreign exchange developments. Kihara noted that while a weaker yen benefits manufacturers by boosting export competitiveness and corporate profits, it also raises import costs, increasing the burden on businesses and households through higher prices. “We need to scrutinise such effects comprehensively,” he said, highlighting the government’s balanced assessment of the currency’s impact on the economy.